September 24, 2014

IN: Lessons of the Indiana Toll Road Bankruptcy
. . . Caitlin Devitt who has a good account of the fallout from the bankruptcy filing in The Bond Buyer, quotes Standard & Poor’s analyst Anne Selting who said toll roads are among the riskier public-private partnerships because “they’re obviously completely dependent on volume and user projections.” And toll road guru Robert Poole said the concession had relied on “a very aggressive financing structure, requiring large debt service payments toward the end of the first decade of the 75-year agreement.” He added that in considering bids from private-sector companies for toll road deals, states should not “base competitions on maximizing such up-front windfalls” as Indiana got with the $3.8 billion it collected. “For one thing, they may well lead the winning bidder to take on excessive debt that jeopardizes its ability to run the project as a business.” You can see how crucial traffic forecasts are to these toll road deals by reading bond analysts’ rating reports.
Roll Call (blog)

IN: Critics of privatizing Indiana Toll Road worry bankruptcy filing will lead to spending cuts
Critics of privatizing the Indiana Toll Road said they are worried that the operator’s bankruptcy filing this week will result in less money being spent on the highway. Chicago-based ITR Concession Co. is seeking to sell the toll road lease to a new operator, saying in its filing to the U.S. Bankruptcy Court in Chicago that it can’t afford the debt payments from the 2006 deal under which its parent company, the Spanish-Australian consortium Cintra-Macquarie, paid Indiana $3.8 billion for the rights to run the highway and keep the toll revenue. Democratic state Sen. John Broden of South Bend, who voted against the lease deal in the Legislature, said Monday he doesn’t believe assurances that the bankruptcy won’t mean any significant changes to the highway’s operations. “If someone buys this they are going to immediately be confronted with the question of how can we run this thing cheaper?” Broden said. “They are going to look for cost savings and cost savings are going to come in the form of fewer employees.”
Greenfield Daily Reporter

TX: Collin County Residents Hope To Slam Brakes On Proposed Toll Road
On Monday night, Christine appeared at a North Central Texas Council of Governments meeting along, along with more than 1,200 others, to try and slam the brakes on the proposed toll road. The consensus of the crowd was — there isn’t a need for it. But Hunt County Commissioners Court Judge John Horn says the county, and various elected leaders in their area strongly support a toll road. Horn says the toll road is needed because of the area’s projected population growth, and because there’s no state money to widen Interstate-30. “TxDOT has not presented us with anything that shows right now any expanded capacity along I-30,” he said. The Texas Turnpike Corporation, a privately held company, proposed the toll road.  CBS